Document:

Exhibit 10.21

EXHIBIT 10.21

COMMON STOCK PURCHASE AGREEMENT

THIS COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is dated as of June ___, 2009,
between World Energy Solutions, Inc., a Delaware corporation (the “Company”), and the Purchaser(s)
named on the signature page to this Agreement (the “Purchaser”). The Company and the Purchaser may
hereinafter be referred to collectively as the “Parties” or individually as a “Party.” Except as
otherwise indicated in this Agreement, capitalized terms used herein shall have the meaning as
defined in Exhibit A attached to this Agreement.

PRELIMINARY STATEMENTS

A. The Company understands that the Purchaser desires to make an equity investment in the
Company.

B. The Company and the Purchaser desire to enter into an agreement pursuant to which the
Purchaser will purchase from the Company, and the Company will sell to the Purchaser, the
restricted shares of common stock as described below.

NOW, THEREFORE, in consideration of the mutual promises and covenants being made in this
Agreement, and for other good, valuable and binding consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

STATEMENT OF AGREEMENT

ARTICLE I

ISSUANCE AND PURCHASE OF COMMON STOCK

1.1 Issuance and Purchase of Common Stock. Subject to the terms and conditions of
this Agreement, the Company will sell to the Purchaser, and the Purchaser will purchase from the
Company, the number of shares (the “Shares”) of the Company’s common stock (the “Common Stock”) set
forth on Schedule 1.1 to this Agreement at a price per share of $_____ (equal to the
average of the bid and ask price as set forth on the Nasdaq Capital Market for the five (5) day
trading days immediately prior to the Settlement Date, subject to a fifteen percent (15%) discount
from that price) (the “Purchase Price”). The Company will issue no more than [1,700,000] Shares
pursuant to this Agreement and similar Agreements with other purchasers in this private offering
(“Other Purchasers”) under a term sheet (“Term Sheet”) relating to the private offering of the
Company’s Common Stock. The obligations of the Purchaser and each of the Other Purchasers to
purchase the Shares hereunder are irrevocable. The obligations of the Purchaser are several and not
joint with the obligation of any Other Purchasers, and the Purchaser shall not be responsible in
any way for the performance of the obligations of any Other Purchasers.

 

 

 

1.2 Settlement. Until such time as aggregate gross proceeds received by the Company
from the Purchaser and the Other Purchasers are at least [$                    ], such proceeds shall be
deposited in a segregated non-interest bearing account at the Company’s primary banking
institution. Settlement of the transactions contemplated in this Agreement (the “Settlement”) will
occur only on or after the date that the aggregate gross proceeds received by the Company from the
Purchaser and the Other Purchasers totals [$                    ], take place at the offices of the Company
at such time and on such date as the Parties may mutually agree, but in no event later than
                    , 2009 (the “Settlement Date”). At the Settlement, the Company will issue to Purchaser
the Shares and deliver to Purchaser certificates for the shares of Common Stock duly registered in
the name of Purchaser. If on the Settlement Date the Company shall not have received aggregate
gross proceeds from the Purchaser and the Other Purchasers as contemplated herein, the offering
will terminate and subscription funds shall be promptly returned to the Purchaser, without interest
or deduction.

ARTICLE II

RESTRICTIONS ON TRANSFERABILITY

The Shares shall not be transferred before satisfaction of the conditions specified in this
Article II, which conditions are intended to ensure compliance with the provisions of the
Securities Act and applicable state securities laws with respect to the transfer of any Shares.
Purchaser, by entering into this Agreement and accepting the Shares, agree to be bound by the
provisions of this Article II.

2.1 Restrictive Legend. Except as otherwise provided in this Article II, each
certificate representing shares of Common Stock shall be stamped or otherwise imprinted with a
legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED, UNLESS A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT IS IN EFFECT AT THE TIME OF SALE OR THE HOLDER
SUBMITS AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE SECURITIES
LAWS, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER, IS AVAILABLE. SUCH
SECURITIES ARE SUBJECT TO THE RESTRICTIONS AND PRIVILEGES SPECIFIED IN THE COMMON
STOCK PURCHASE AGREEMENT, DATED AS OF JUNE ___, 2009, BETWEEN WORLD ENERGY
SOLUTIONS, INC. AND THE PURCHASER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
WORLD ENERGY SOLUTIONS, INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER
HEREOF UPON WRITTEN REQUEST. THE HOLDER OF THIS CERTIFICATE AGREES TO BE BOUND BY
THE TERMS AND CONDITIONS OF SUCH COMMON STOCK PURCHASE AGREEMENT.”

 

2

 

2.2 Transfers. The Purchaser agrees that it will not sell, transfer or otherwise
dispose of any shares of restricted Common Stock, in whole or in part, except pursuant to an
effective registration statement under the Securities Act, or unless the Purchaser submits an
opinion of counsel reasonably satisfactory to the Company and its counsel that an exemption from
registration exists thereunder. Each certificate, if any, evidencing such shares of restricted
Common Stock issued upon such transfer shall bear the restrictive legend set forth in Section 2.1,
unless in the written opinion of the transferee’s or Purchaser’s counsel delivered to the Company
in connection with such transfer (which opinion shall be reasonably satisfactory to the Company)
such legend is not required in order to ensure compliance with the Securities Act.

2.3 Termination of Restrictions. The restrictions imposed by this Article II upon the
transferability of the restricted Common Stock and the legend requirement of Section 2.1 shall
terminate as to any particular share (i) when and so long as such security shall have been
registered under the Securities Act and disposed of pursuant thereto, or (ii) when the Purchaser
thereof shall have delivered to the Company the written opinion of counsel to such Purchaser, which
opinion shall be reasonably satisfactory to the Company, stating that such legend is not required
in order to ensure compliance with the Securities Act. Whenever the restrictions imposed by this
Article II shall terminate as to any restricted Common Stock, as herein above provided, the
Purchaser thereof shall be entitled to receive from the Company, at the expense of the Company, a
new certificate representing such Common Stock, not bearing the restrictive legend set forth in
Section 2.1.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

As a material inducement to the Purchaser entering into this Agreement and purchasing the
Shares, the Company represents and warrants to the Purchaser, which representation and warranty
shall be true and correct as of the date signed by the Purchaser and as of the date of the
Settlement, as follows:

3.1 Corporate Status. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. The Company has all
requisite corporate power and authority to own or lease, as the case may be, its properties and to
carry on its business as now conducted. The Company is qualified or licensed to conduct business
in all jurisdictions where its ownership or lease of property and the conduct of its or their
business requires such qualification or licensing, except to the extent that failure to so qualify
or be licensed would not have a Material Adverse Effect on the Company. There is no pending, or to
the knowledge of the Company threatened, proceeding for the dissolution or liquidation or involving
the insolvency of the Company.

3.2 Corporate Power and Authority. The Company has the corporate power and authority
to execute and deliver this Agreement and the Shares, to perform its obligations hereunder and
consummate the transactions contemplated hereby and thereby. The Company
has taken all necessary corporate action to authorize the execution, delivery and performance
of this Agreement, the Shares and the transactions contemplated hereby and thereby.

 

3

 

3.3 Enforceability. This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and general equitable principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.

3.4 Non-Contravention and No Violation. The Company is not in violation of or default
under, nor will the execution and delivery by the Company of this Agreement, the consummation of
the transactions contemplated hereby and thereby, and the compliance by the Company with the terms
and provisions hereof and thereof, (a) result in a violation or breach of, or constitute, with the
giving of notice or lapse of time, or both, a material default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any
Contract to which the Company is a party or by which the Company or any material portion of the
Company’s properties or assets may be bound, (b) violate any Requirement of Law applicable to the
Company or any material portion of the Company’s properties or assets, or (c) result in the
imposition of any Lien upon any of the properties or assets of the Company, or conflict with the
Company’s Articles of Incorporation or Bylaws or under any indenture, mortgage Contract or
instrument to which the Company is a party, except where any of the foregoing would not have a
Material Adverse Effect on the Company.

3.5 Consents/Approvals. No consent, approval, waiver or other action by any Person
under any Contract to which the Company is a party, or by which any of their respective properties
or assets are bound, is required or necessary for the execution, delivery or performance by the
Company of this Agreement and the consummation of the transactions contemplated hereby, except
where the failure to obtain such consents, filings, authorizations, approvals or waivers or make
such filings would not have a Material Adverse Effect on the Company.

3.6 Capitalization. The authorized capital stock of the Company consists of
15,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock. As of June ___, 2009,
the Company had outstanding [8,517,305] shares of Common Stock, all of which were duly authorized,
validly issued, fully paid and non-assessable and had no outstanding shares of Preferred Stock.
Except (a) as contemplated by this Agreement, and (b) as disclosed on Schedule 3.6, the
Company has (x) no rights, options, warrants, convertible securities, subscription rights or other
agreements, calls, plans, contracts or commitments of any kind relating to the issued and unissued
capital stock of, or other equity interest in, the Company outstanding or authorized, (y) the
consummation of the transactions consummated by this Agreement will not cause any anti-dilution
adjustments to be made to any of the Company’s outstanding securities and (z) no contractual
obligations of the Company to repurchase, redeem or otherwise acquire any shares of the Company
Common Stock. Upon delivery to the Purchaser of the certificates representing the shares of Common
Stock and payment of the Purchase Price, the Purchaser will acquire good, valid and marketable
title, subject to the limitations on marketability contained in this Agreement or imposed pursuant
to the Securities Act, to and beneficial and record ownership of the Shares, and the shares of Common Stock will be validly
issued, fully paid and non-assessable.

 

4

 

3.7 SEC Reports. Since November 8, 2006, the Company has made all filings (the “SEC
Reports”) required to be made by it under the Securities Act and the Securities Exchange Act of
1934, as amended (the “Exchange Act”). The SEC Reports, when filed, complied in all material
respects with all applicable requirements of the Securities Act and the Exchange Act and the
securities laws, rules and regulations of any state and pursuant to any Requirements of Law. To
the best of the Company’s knowledge, the SEC Reports, when filed, did not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the circumstances under which
they were made, not misleading. The Company has made accessible to Purchaser true, accurate and
complete copies of the SEC Reports which were filed with the SEC since January 1, 2009.

3.8 Financial Statements. Each of the balance sheets included in the SEC Reports
(including any related notes and schedules) fairly presents in all material respects the financial
position of the Company as of its date, and each of the other financial statements included in the
SEC Reports (including any related notes and schedules) fairly presents in all material respects
the results of operations or other information therein of the Company for the periods or as of the
dates therein set forth in accordance with GAAP consistently applied and, where applicable, the
rules of the SEC and the Public Company Accounting Oversight Board, during the periods involved
(except that the interim reports are subject to normal recording adjustments which might be
required as a result of year-end audit and except as otherwise stated therein).

3.9 Sarbanes-Oxley; Internal Accounting Controls. The Company is in material
compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of
the date of this Agreement. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure
controls and procedures to ensure that information required to be disclosed by the Company in the
reports it files or submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules and forms. The Company’s certifying
officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of
the end of the period covered by the Company’s most recently filed periodic report under the
Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their evaluations as of the
Evaluation Date, and found that the Company’s disclosure controls and procedures were effective at
the reasonable assurance level to ensure that information required to be disclosed by the Company
in the reports it files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange Commission’s rules and
forms. Since the Evaluation Date, there have been no changes in the Company’s internal control
over financial reporting (as such term is defined in the Exchange Act) that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting.

 

5

 

3.10 Undisclosed Liabilities. As of March 31, 2009, except for liabilities and losses
incurred in the ordinary course of business since that date, the Company did not have any material
direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or
unsecured, subordinated or unsubordinated, matured or unmatured, accrued, absolute, contingent,
regulatory or administrative charges or lawsuits brought, whether or not of a kind required by GAAP
to be set forth on a financial statement, that were not fully and adequately reflected or reserved
for in the financial statements contained in the Company’s Quarterly Report on Form 10-Q as of such
date, or otherwise disclosed in the SEC Reports. The Company is not the subject of any inquiry,
investigation or similar matter being conducted by the SEC, any state securities regulator, the
Nasdaq Capital Market, or other government body.

3.11 Material Changes. Except as set forth in the SEC Reports, since March 31, 2009,
there has been no Material Adverse Change in or which may be reasonably expected to affect the
Company. In addition, the description of the Company’s business contained in the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2008 is not materially inconsistent with
its current operations. Except as set forth in the SEC Reports, since March 31, 2009, there has
not been (i) any direct or indirect redemption, purchase or other acquisition by the Company of any
shares of the Common Stock (other than pursuant to the withholding of shares upon a stock option
exercise or restricted stock grant), or (ii) declaration, setting aside or payment of any dividend
or other distribution by the Company with respect of the Common Stock.

3.12 Litigation. Except as set forth in the SEC Reports, the Company has not received
any notice of any outstanding judgments, rulings, orders, writs, injunctions, awards or decrees of
any court, government or other authority against the Company which could have, or is a party to any
litigation or similar proceeding including an arbitration proceeding which could have, if decided
adversely to their interests, a Material Adverse Effect on the Company. The Company has not
received notice of (i) any customer or other complaint threatening any litigation or other such
proceeding or (ii) any investigation, inquiry or similar proceeding from any governmental authority
or agency.

3.13 Investment Company. The Company is not and after giving effect to the sale of
the Shares will not be an “investment company” or an entity “controlled” by an “investment company”
as such terms are defined in the Investment Company Act of 1940, as amended.

3.14 No Commissions. The Company has not incurred any obligation for any finder’s or
broker’s or agent’s fees or commissions in connection with the purchase of the Shares.

3.15 Title. Except as set forth on Schedule 3.15 hereto, the Company has good
and marketable title to all properties and assets, owned by it, free and clear of all Liens,
charges, encumbrances or restrictions, except such as are not materially significant or important
in relation to the Company’s business; all of the material leases and subleases under which the
Company is the lessor or sublessor of properties or assets or under which the Company hold
properties or assets as lessee or sublessee are in full force and effect, and the Company is not in
default in any material respect with respect to any of the terms or provisions of any of such
leases or subleases, and no material claim has been asserted by anyone adverse to rights of the
Company as lessor, sublessor, lessee or sublessee under any of the leases or subleases
mentioned above, or affecting or questioning the right of the Company to continued possession of
the leased or subleased premises or assets under any such lease or sublease. The Company owns or
leases all such properties as are necessary to its operations as now conducted and to be conducted,
as presently planned.

 

6

 

3.16 Compliance With Laws, Licenses, Etc. The Company has not received notice of any
violation of or noncompliance with any federal, state, local or foreign, laws, ordinances,
regulations and orders applicable to its business which has not been cured, the violation of, or
noncompliance with which, would have a Material Adverse Effect on the business or operations of the
Company. The Company has all licenses and permits and other governmental certificates,
authorizations and permits and approvals (collectively “Licenses”) required by every federal, state
and local government or regulatory body for the operation of its business as currently conducted
and the use of its properties, except where the failure to be licensed would not have a Material
Adverse Effect on the business of the Company. The Licenses are in full force and effect and no
violations are or have been recorded in respect of any License and no proceeding is pending or
threatened to revoke or limit any thereof.

3.17 Exemption From Registration. Based upon the representations and warranties of
each of the Purchaser and each Other Purchaser, the sale of the Shares is exempt from the
registration requirements of the Securities Act.

3.18 Eligibility to Use Form S-3. The Company is eligible to use Form S-3 and intends
to use such form for the public sale by the Purchaser of the resale of the Shares of Common Stock
by Purchasers under this Agreement.

3.19 Stock Options. With regard to the Company’s practices in connection with the
granting of stock options, it has: (i) granted all stock options and restricted stock at or above
the fair market value as determined by its relevant stock option or equity incentive plan, (ii)
utilized the date of (or an average of prior five trading days) any applicable meeting of its board
of directors or committee of its board of directors for the purposes of determining fair market
value of stock options and restricted stock it has granted, and (iii) the Company is not aware of
any inquiry or investigation which has been initiated or is being considered with respect to its
stock option practices, whether by its registered independent public accounting firm, independent
counsel or other party.

3.20 NASDAQ Compliance. The Company’s Common Stock is registered pursuant to Section
12 of the Exchange Act and is listed on the Nasdaq Capital Market, and the Company has taken no
action designed to, or likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act or de-listing the Common Stock from the Nasdaq Capital Market, nor has
the Company received any notification that the SEC or the Nasdaq Capital Market is contemplating
terminating such registration or listing (other than prior notifications described in the SEC
Reports which have been resolved). The issuance by the Company of the Shares shall not have the
effect of terminating the registration of the Common Stock or delisting the Common Stock from the
Nasdaq Capital Market.

 

7

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

As a material inducement to the Company entering into this Agreement and issuing and/or
selling the Shares, each Purchaser represents and warrants to the Company as follows:

4.1 Investment Intent. The Purchaser is acquiring the Shares hereunder for the
Purchaser’s own account and with no present intention of distributing or selling the Shares or any
interest in the Shares. The Purchaser agrees that it will not sell or otherwise dispose of any of
the Shares or any interest in the Shares unless such sale or other disposition has been registered
or qualified (as applicable) under the Securities Act and applicable state securities laws or, in
the opinion of the Purchaser’s counsel delivered to the Company (which opinion shall be reasonably
satisfactory to the Company) such sale or other disposition is exempt from registration or
qualification under the Securities Act and applicable state securities laws. The Purchaser
understands that the sale of the Shares acquired by the Purchaser hereunder has not been registered
under the Securities Act, but the Shares are issued through transactions exempt from the
registration requirements of, among other things, Section 4(2) of the Securities Act and Rule 506
thereunder, and that the reliance of the Company on such exemption from registration is predicated
in part on these representations and warranties of the Purchaser. The Purchaser acknowledges that
pursuant to Section 2.1 a restrictive legend consistent with the foregoing has been or will be
placed on the certificates representing the shares of Common Stock until such legend is permitted
to be removed under applicable law. The Purchaser will have no right to require registration of the
shares of Common Stock, and the Company is under no obligation to cause an exemption for resale to
be available or register the shares of Common Stock, except as provided in this Agreement.

4.2 Adequate Information. The Company has made available and the Purchaser has
reviewed such information that the Purchaser considers necessary or appropriate to evaluate the
risks and merits of an investment in the Shares including, without limitation, the Company’s Form
10-K for the fiscal year ended December 31, 2008, Form 10-Q for the quarterly period ended March
31, 2009, Proxy Statement filed with the SEC on April 17, 2009, and Current Reports on Form 8-K
filed with the SEC since January 1, 2009.

4.3 Opportunity to Ask Questions. The Purchaser has had the opportunity to question,
and, to the extent deemed necessary or appropriate, has questioned representatives of the Company
so as to receive answers and verify information obtained in the Purchaser’s examination of the
Company, including the information that the Purchaser has reviewed in relation to its investment in
the Shares.

4.4 No Other Representations. No oral or written representations have been made to
the Purchaser in connection with the Purchaser’s acquisition of the Shares which were in any way
inconsistent with the information reviewed by the Purchaser. The Purchaser acknowledges that no
representations or warranties of any type or description have been made to it by any Person with
regard to the Company, any of its respective businesses, properties or prospectus or the investment
contemplated herein, other than the representations and warranties set forth in Article III hereof.
The Purchaser has not made its decision to acquire Shares or to execute and
deliver this Agreement on the basis of any belief that any officer, director or affiliate of
the Company or any current stockholder of the Company would make an investment in the Company now
or in the future.

 

8

 

4.5 Knowledge and Experience. The Purchaser is an “accredited investor” as such term
is defined in Rule 501(a) of Regulation D promulgated by the SEC under the Securities Act. The
Purchaser has such knowledge and experience in financial, tax and business matters, including
substantial experience in evaluating and investing in common stock and other securities (including
the common stock and other securities of new and speculative companies), so as to enable the
Purchaser to utilize the information made available to the Purchaser to evaluate the merits and
risks of an investment in the Shares and to make an informed investment decision with respect
thereto.

4.6 Additional Representations. The Purchaser will make such additional
representations and warranties and furnish such information regarding the Purchaser’s investment
experience and financial position as the Company may reasonably require, and if there should be any
material change in the information set forth herein prior to the closing of the sale of the Shares,
the Purchaser will immediately furnish such revised or corrected information to the Company.

4.7 Term Sheet. The Purchaser has received a copy of the Term Sheet and any and all
amendments, supplements and Appendices thereto. Except for the information contained in the Term
Sheet, as amended or supplemented and except for the information that the Purchaser or its
advisors, if any, have requested and been furnished in writing, neither the Purchaser nor its
advisors has been furnished any offering material or literature related to the Company.

4.8 Independent Decision. The Purchaser is not relying on the Company, on any one of
its representatives, or on any legal or other opinion in the materials reviewed by the Purchaser
with respect to the financial or tax considerations of the Purchaser relating to its investment in
the Shares. The Purchaser has relied solely on the representations, warranties, covenants and
agreements of the Company in this Agreement (including the Exhibits and Schedules hereto) and on
its examination and independent investigation in making its decision to acquire the Shares. The
Purchaser has been afforded the opportunity to obtain, and has been furnished, all material that it
has requested relating to the proposed operation of the Company, any other matters relating to the
business and properties of the Company and the offer and sale of the Shares.

4.9 Legal Existence and Authority. If the Purchaser is a corporation, partnership,
limited liability company, trust or other entity, the Purchaser has been duly formed and is validly
existing and in good standing under the laws of the jurisdiction of its formation with full power
and authority to acquire and hold the Shares and to execute, deliver and comply with the terms of
this Agreement and such other documents required to be executed and delivered by the undersigned in
connection with this subscription.

4.10 No Defaults or Conflicts. The execution and delivery of this Agreement by the
Purchaser and the performance of its obligations hereunder does not conflict with or constitute a
default under any instruments governing the Purchaser, or any law, regulation, order or agreement
to which the Purchaser is a party or to which the undersigned is bound.

 

9

 

4.11 Validity; Enforceability; Binding Effect. This Agreement has been duly and
validly authorized, executed and delivered by the Purchaser, and the agreements herein and therein
constitute valid, binding and enforceable agreements of the Purchaser. The Purchaser is not a
partnership, common trust fund, special trust, pension fund, retirement plan or other entity in
which the partners or participants, as the case may be, may designate the particular investments to
be made or the allocation thereof.

4.12 Confidentiality. Unless required by law, the Purchaser shall not disclose, and
shall maintain confidential any non-public information related to the Company, provided that the
undersigned may disclose such information to any of its advisors, attorneys and accountants, if
such advisor, attorney and/or accountant shall have agreed to be bound by this provision.

4.13 Residence; No General Solicitation. The Purchaser is a resident of the state(s)
or other jurisdiction(s) indicated on the signature page hereto. The Purchaser is not aware of any
general solicitation or advertising relating to the offer or sale of the Shares.

4.14 Non-Disclosure. Purchaser acknowledges that certain information contained in the
disclosure document provided to Purchaser in connection with the private offering of the Common
Stock has not been otherwise publicly disclosed. Accordingly, Purchaser agrees to keep such
information confidential for a period ending on the earlier to occur of (i) the first anniversary
of the Settlement Date, or (ii) the date upon which such information is publicly disclosed by the
Company.

ARTICLE V

COVENANTS

5.1 Filings. Each of the Company and the Purchaser shall make on a prompt and timely
basis all governmental or regulatory notifications and filings required to be made by it for the
consummation of the transactions contemplated hereby.

5.2 Further Assurances. Each of the Company and the Purchaser shall execute and
deliver such additional instruments and other documents and shall take such further actions as may
be necessary or appropriate to effectuate, carry out and comply with all of the terms of this
Agreement and the transactions contemplated hereby.

5.3 Cooperation. Each of the Company and the Purchaser agree to cooperate with the
other in the preparation and filing of all forms, notifications, reports and information, if any,
required or reasonably deemed advisable pursuant to any Requirement of Law in connection with the
transactions contemplated by this Agreement and to use their respective commercially reasonable
efforts to agree jointly on a method to overcome any objections by any Governmental Authority to
any such transactions. Except as may be specifically required hereunder, the Company shall not be
required to agree to take any action that in the reasonable opinion of the Company would result in
or produce a Material Adverse Effect on the Company.

5.4 Notification of Certain Matters. Each of the Company and the Purchaser shall give
prompt notice to the other of the occurrence, or non-occurrence, of any event which would
be likely to cause any representation or warranty herein to be untrue or inaccurate, or any
covenant, condition or agreement herein not to be complied with or satisfied.

 

10

 

ARTICLE VI

REGISTRATION OF THE SHARES

6.1 Registration Procedures and Other Matters. The Company shall:

(a) subject to receipt of necessary information from the Purchasers after prompt request from
the Company to the Purchasers to provide required Purchaser information, prepare and file with the
SEC, within 90 days after the Settlement Date, a registration statement on Form S-3 (the
“Registration Statement”) to enable the resale of the Shares by the Purchasers;

(b) subject to receipt of necessary information from the Purchasers after prompt request from
the Company to the Purchasers to provide required Purchaser information, use its commercially
reasonable efforts to cause the Registration Statement to become effective within 90 days after the
Settlement Date; provided, however, that if the Company has an outstanding confidential treatment
request (“CTR”) application on file with the SEC as of the date the SEC provides notice that it has
not further comments, then the Company shall use its commercially reasonable efforts to clear the
CTR with the SEC and shall submit a request for acceleration of effectiveness of the Registration
Statement within two business days following clearance of the CTR by the SEC;

(c) use commercially reasonable efforts to prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus related thereto (the “Prospectus”)
used in connection therewith as may be necessary to keep the Registration Statement current,
effective and free from any material misstatement or omission to state a material fact for a period
not exceeding, with respect to each Purchaser’s Shares, until the earlier of (i) the date on which
the Purchaser may sell all Shares then held by the Purchaser without restriction by the volume
limitations of Rule 144 of the Securities Act, or (ii) such time as all Shares purchased by such
Purchaser pursuant to this Agreement have been sold pursuant to a registration statement;

(d) comply with any prospectus publication requirement then applicable to it and furnish to
each Purchaser with respect to the Shares registered under the Registration Statement such number
of copies of the Registration Statement, Prospectuses (and preliminary Prospectuses) in conformity
with the requirements of the Securities Act and such other documents as such Purchaser may
reasonably request, in order to facilitate the public sale or other disposition of all or any of
the Shares by such Purchaser; provided, however, that the obligation of the Company to deliver
copies of Prospectuses (or preliminary Prospectuses) to the Purchaser shall be subject to the
receipt by the Company of reasonable assurances from the Purchaser that the Purchaser will comply
with the applicable provisions of the Securities Act and of such other securities or blue sky laws
as may be applicable in connection with any use of such Prospectuses (or preliminary Prospectuses);

 

11

 

(e) file documents required of the Company for normal blue sky clearance in states specified
in writing by the Purchaser and use its commercially reasonable efforts to maintain such blue sky
qualifications during the period the Company is required to maintain the effectiveness of the
Registration Statement pursuant to Section 6.1(c); provided, however, that the Company shall not
be required to qualify to do business or consent to service of process in any jurisdiction in which
it is not now so qualified or has not so consented;

(f) bear all expenses in connection with the procedures in paragraph (a) through (e) of this
Section 6.1 (other than underwriting discounts or commissions, brokers’ fees and similar selling
expenses, and any other fees (including attorneys’ fees) or expenses incurred by the Purchaser) and
the registration of the Shares pursuant to the Registration Statement;

(g) advise the Purchaser, promptly after it shall receive notice or obtain knowledge of the
issuance of any stop order by the SEC delaying or suspending the effectiveness of the Registration
Statement or of the initiation or threat of any proceeding for that purpose; and it will promptly
use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued; and

(h) provide a “Plan of Distribution” section of the Registration Statement in the form
reasonably acceptable to the Company, the Purchaser, and each Other Purchaser.

The Company understands that the Purchaser disclaims being an underwriter, but if the SEC
deems the Purchaser to be an underwriter the Company shall not be relieved of any obligations it
has hereunder; provided, however that if the Company receives notification from the
SEC that the Purchaser is deemed an underwriter, then the period by which the Company is obligated
to submit an acceleration request to the SEC shall be extended to the earlier of (i) the 45th day
after such SEC notification, or (ii) 120 days after the initial filing of the Registration
Statement with the SEC.

6.2 Liquidated Damages. If the Registration Statement has not been declared effective
by the SEC within 150 days of the Settlement Date, then the Company shall, as additional
consideration and not as a penalty, deliver to the Purchaser on such 150th day, an amount of cash
equal to 0.5% of the Purchase Price of the Common Stock purchased by such Purchaser.

6.3 Transfer of Shares After Registration; Suspension.

(a) The Purchaser shall not effect any disposition of the Shares that would constitute a sale
or resale within the meaning of the Securities Act except as contemplated in the Registration
Statement or as otherwise permitted by law, and the Purchaser will promptly notify the Company of
any changes in the information set forth in the Registration Statement regarding the Purchaser or
its plan of distribution.

 

12

 

(b) Except in the event that paragraph (c) below applies, the Company shall (i) if deemed
necessary by the Company, prepare and file from time to time with the SEC a post-effective
amendment to the Registration Statement or a supplement to the related Prospectus or a supplement
or amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will 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 not misleading, and so that, as thereafter delivered to purchasers of the
Shares being sold thereunder, such Prospectus will 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 were made, not misleading; (ii)
provide the Purchaser copies of any documents filed pursuant to Section 6.3(b)(i) as the Purchaser
may reasonably request; and (iii) inform each Purchaser that the Company has complied with its
obligations in Section 6.3(b)(i) (or that, if the Company has filed a post-effective amendment to
the Registration Statement which has not yet been declared effective, the Company will notify the
Purchaser to that effect, will use its commercially reasonable efforts to secure the effectiveness
of such post-effective amendment as promptly as possible and will promptly notify the Purchaser
pursuant to Section 6.3(b)(i) hereof when the amendment has become effective).

(c) Subject to paragraph (d) below, in the event (i) of any request by the SEC or any other
Governmental Authority during the period of effectiveness of the Registration Statement for
amendments or supplements to a Registration Statement or related Prospectus or for additional
information; (ii) of the issuance by the SEC or any other Governmental Authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of any proceedings for
that purpose; (iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the Shares for resale in
any jurisdiction or the initiation or threatening of any proceeding for such purpose; or (iv) of
any event or circumstance which, upon the advice of its counsel, necessitates the making of any
changes in the Registration Statement or Prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or any omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading, and that in the
case of the Prospectus, it will not contain any untrue statement of a material fact or any omission
to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, then the Company
shall deliver a certificate in writing to the Purchaser (the “Suspension Notice”) to the effect of
the foregoing and, upon receipt of such Suspension Notice, the Purchaser will refrain from
reselling any Shares pursuant to the Registration Statement (a “Suspension”) until the Purchaser’s
receipt of copies of a supplemented or amended Prospectus prepared and filed by the Company, or
until it is advised in writing by the Company that the current Prospectus may be used, and has
received copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such Prospectus. In the event of any Suspension, the Company will
use its commercially reasonable efforts to cause the use of the Prospectus so suspended to be
resumed as soon as reasonably practicable within 20 business days after the delivery of a
Suspension Notice to the Purchaser. In addition to and without limiting any other remedies
(including, without limitation, at law or at equity) available to the Purchaser, the Purchaser
shall be entitled to specific performance in the event that the Company fails to comply with the
provisions of this Section 6.3(c).

(d) Notwithstanding the foregoing paragraphs of this Section 6.3, the Purchaser shall not be
prohibited from reselling Shares under the Registration Statement as a result of Suspensions for
more than 60 days in any twelve month period, unless, in the good faith
judgment of the Company’s Board of Directors, upon the written opinion of counsel of the
Company, the resale of Shares under the Registration Statement in reliance on this paragraph 6.3(d)
would be reasonably likely to cause a violation of the Securities Act or the Exchange Act and
result in liability to the Company.

 

13

 

(e) Provided that a Suspension is not then in effect, the Purchaser may resell Shares under
the Registration Statement, provided that it complies with any prospectus delivery requirement then
applicable to it. Upon receipt of a request therefor, the Company has agreed to provide an
adequate number of current Prospectuses (including documents incorporated by reference therein) to
the Purchaser and to supply copies to any other parties requiring such Prospectuses.

ARTICLE VII

INDEMNIFICATION

7.1 Indemnification Generally. The Company, on the one hand, and the Purchaser, on
the other hand, shall indemnify the other from and against any and all losses, damages,
liabilities, claims, charges, actions, proceedings, demands, judgments, settlement costs and
expenses of any nature whatsoever (including, without limitation, attorneys’ fees and expenses) or
deficiencies resulting from any breach of a representation, warranty or covenant by the
Indemnifying Party (including indemnification by the Company of the Purchaser for any failure by
the Company to deliver, or for any failure by the Purchaser to receive, stock certificates
representing the Shares on the Settlement Date) and all claims, charges, actions or proceedings
incident to or arising out of the foregoing (“Losses”). Notwithstanding the foregoing, the
Indemnifying Party shall not be liable for any Losses to the extent such Losses arise out of,
result from, or are increased by, the breach of this Agreement by, or the fraudulent acts,
negligence or willful misconduct of, the Indemnified Party.

7.2 Indemnification Procedures. Each Person entitled to indemnification under this
Article VII (an “Indemnified Party”) shall give notice as promptly as reasonably practicable to
each party required to provide indemnification under this Article VII (an “Indemnifying Party”) of
the commencement of any action, suit, proceeding or investigation or threat thereof made in writing
in respect of which indemnity may be sought hereunder; provided, however, failure to so notify an
Indemnifying Party shall not relieve such Indemnifying Party from any liability that it may have
otherwise than on account of this indemnity agreement so long as such failure shall not have
materially prejudiced the position of the Indemnifying Party. Upon such notification, the
Indemnifying Party shall assume the defense of such action if it is a claim brought by a third
party, and after such assumption the Indemnified Party shall not be entitled to reimbursement of
any expenses incurred by it in connection with such action except as described below. In any such
action, any Indemnified Party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the contrary or (ii) the
named parties in any such action (including any impleaded parties) include both the Indemnifying
Party and the Indemnified Party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing or conflicting interests between them. An
Indemnifying Party who is not entitled

 

14

 

 to, or
elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel in any
one action for all parties indemnified by such Indemnifying Party with respect to such claim except
for local counsel if the attorneys selected by the Indemnified Party do not maintain an office
within the jurisdiction of the court, 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. The Indemnifying Party shall not be
liable for any settlement of any proceeding effected without its written consent (which shall not
be unreasonably withheld or delayed by such Indemnifying Party), but if settled with such consent
or if there be final judgment for the plaintiff, the Indemnifying Party shall indemnify the
Indemnified Party from and against any loss, damage or liability by reason of such settlement or
judgment. In the event that any indemnifying party enters into any settlement without the written
consent of the indemnified party the indemnifying party shall not consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff of a release of such indemnified party from all liability in respect of
such claim or litigation.

ARTICLE VIII

MISCELLANEOUS

8.1 Notices. All notices, requests, demands, claims, and other communications
hereunder shall be in writing and shall be delivered by certified or registered mail (first class
postage pre-paid), guaranteed overnight delivery, or facsimile transmission if such transmission is
confirmed by delivery by certified or registered mail (first class postage pre-paid) or guaranteed
overnight delivery, to the following addresses and telecopy numbers (or to such other addresses or
telecopy numbers which such Party shall designate in writing to the other Party):

	 	 	 	 	 
	 

	 	If to the Company to:
	 	World Energy Solutions, Inc.

446 Main Street

Worcester, MA 01608

Attn: Carolyn Oldenburg, Esq.

General Counsel

Fax:                     
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Michael A. Refolo, Esq.

Mirick, O’Connell, DeMallie & Lougee, llp

100 Front Street

Worcester, MA 01608
	 
	 	 	 	 
	 

	 	If to a Purchaser:
	 	At the address indicated on the signature page

8.2 Loss or Mutilation. Upon receipt by the Company from any Purchaser of evidence
reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of
a certificate representing shares of Common Stock and indemnity reasonably satisfactory to it (it
being understood that the written agreement of the Purchaser or an Affiliate thereof shall be
sufficient indemnity) and in case of mutilation upon surrender and cancellation
hereof or thereof, the Company will execute and deliver in lieu hereof or thereof a new stock
certificate of like tenor to such Purchaser; provided, in the case of mutilation, no indemnity
shall be required if the certificate representing shares of Common Stock in identifiable form is
surrendered to the Company for cancellation.

 

15

 

8.3 Remedies. Each Party acknowledges that the other Party would not have an adequate
remedy at law for money damages in the event that any of the covenants or agreements of such Party
in this Agreement was not performed in accordance with its terms, and it is therefore agreed that
each Party in addition to and without limiting any other remedy or right such Party may have, shall
have the right to an injunction or other equitable relief in any court of competent jurisdiction,
enjoining any such breach and enforcing specifically the terms and provisions hereof. All rights,
powers and remedies under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of
any thereof by any Party shall not preclude the simultaneous or later exercise of any other such
right, power or remedy by such Party.

8.4 Entire Agreement. This Agreement (including Exhibit A, “Definitions,” and
any other exhibits, appendices and schedules attached hereto), and the other documents delivered at
the Settlement pursuant hereto, contain the entire understanding of the Parties in respect of the
subject matter hereof and supersede all prior agreements and understandings between or among the
Parties with respect to such subject matter. The exhibits and schedules hereto constitute a part
hereof as though set forth in full above.

8.5 Expenses; Taxes. Except as otherwise provided in this Agreement, the Parties
shall pay their own fees and expenses, including their own counsel fees, incurred in connection
with this Agreement or any transaction contemplated hereby. Further, except as otherwise provided
in this Agreement, any sales tax, stamp duty, deed transfer or other tax (except taxes based on the
income of the Purchaser) arising out of the sale of the Shares by the Company to the Purchaser and
consummation of the transactions contemplated by this Agreement shall be paid by the Company.

8.6 Amendment. This Agreement may be modified or amended solely with the written
consent of both the Company and the Purchaser.

8.7 Waiver. No failure to exercise, and no delay in exercising, any right, power or
privilege under this Agreement shall operate as a waiver, nor shall any single or partial exercise
of any right, power or privilege hereunder preclude the exercise of any other right, power or
privilege. No waiver of any breach of any provision shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other provision, nor shall any waiver be implied
from any course of dealing between the Parties. No extension of time for performance of any
obligations or other acts hereunder or under any other agreement shall be deemed to be an extension
of the time for performance of any other obligations or any other acts. The rights and remedies of
the Parties under this Agreement are in addition to all other rights and remedies, at law or equity
that they may have against each other.

8.8 Binding Effect; Assignment. The rights and obligations of this Agreement shall
bind and inure to the benefit of the Parties and their respective successors and legal assigns.
The provisions of this Agreement are intended to be for the benefit of all Purchasers from time to
time of the Shares and shall be enforceable by any such Purchaser.

 

16

 

8.9 Counterparts. This Agreement may be executed in any number of counterparts
(whether by original signature or a facsimile thereof), each of which shall be an original but all
of which together shall constitute one and the same instrument.

8.10 Headings. The headings contained in this Agreement are for convenience of
reference only and are not to be given any legal effect and shall not affect the meaning or
interpretation of this Agreement.

8.11 GOVERNING LAW; INTERPRETATION. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED FOR ALL PURPOSES BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE
CONFLICTS OF LAWS RULES OF ANY OTHER JURSIDICTION.

8.12 Severability. The parties stipulate that the terms and provisions of this
Agreement are fair and reasonable as of the date of this Agreement. However, if any provision of
this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
If, moreover, any of those provisions shall for any reason be determined by a court of competent
jurisdiction to be unenforceable because excessively broad or vague as to duration, geographical
scope, activity or subject, it shall be construed by limiting, reducing or defining it, so as to be
enforceable

8.13 Survival. Each representation, warranty, covenant and agreement of the parties
set forth in this Agreement is independent of each other representation, warranty, covenant and
agreement. Each representation and warranty made by any Party in this Agreement shall survive the
Settlement through the period ending on the date three years from the Settlement Date.

[Signature Page Follows.]

 

17

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered
as of the date first above written.

	 	 	 	 	 
	COMPANY:

WORLD ENERGY SOLUTIONS, INC.

 	 	 
	By:  	 	 	 
	Name:  	 	 	 
	Title:  	 	 	 

	 	 	 	 	 
	PURCHASER:
	 	 	 	 
	 
	 	 	 	 
	For purchases made by Individual

	 	For purchases made by an Entity	 	 
	 
	 	 	 	 
	Name of Individual Purchaser over age 21
(Print)

	 	Name of Partnership, Company, Trust
or Qualified Plan	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

Signature

	 	 

Signature

	 	 
	 
	 	 	 	 
	 

Residence Street Address

	 	 

Print Name
	 	 
	 
	 	 	 	 
	 

City, State, Zip Code

	 	 

Title
	 	 
	 
	 	 	 	 
	 

Mailing Address

	 	 

Telephone No.
	 	 
	 
	 	 	 	 
	 

City, State, Zip Code

	 	 

Tax Identification Number
	 	 
	 
	 	 	 	 
	 

Telephone No.

	 	 

Street Address of Company/Partnership
	 	 
	 
	 	 	 	 
	 

	 	 

City, State, Zip Code
	 	 

 

18

 

EXHIBIT A

DEFINITIONS

1. Defined Terms. As used herein the following terms shall have the following meanings:

“Agreement” means this Common Stock Purchase Agreement.

“Business Day” means any day that is not a Saturday or Sunday or a day on which banks are
required or permitted to be closed in the Commonwealth of Massachusetts.

“Common Stock” means the common stock, $.0001 par value per share, of the Company, as
constituted on the date hereof, and any capital stock into which such Common Stock may thereafter
be changed, and shall also include (i) capital stock of the Company of any other class (regardless
of how denominated) issued to the holders of shares of Common Stock upon any reclassification
thereof which is also not preferred as to dividends or assets over any other class of stock of the
Company and which is not subject to redemption and (ii) shares of common stock of any successor or
acquiring corporation received by or distributed to the holders of Common Stock of the Company.

“Company” has the meaning set forth in the Preamble of this Agreement.

“Contract” means any agreement, indenture, lease, sublease, license, sublicense, promissory
note, evidence of indebtedness, insurance policy, annuity, mortgage, restriction, commitment,
obligation or other contract, agreement or instrument (whether written or oral).

“CTR” has the meaning set forth in Section 6.1(b) of this Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor federal
statute, and the rules and regulations promulgated thereunder, all as the same shall be in effect
from time to time.

“GAAP” means generally accepted accounting principles in effect in the United States of
America from time to time.

“Governmental Authority” means any nation or government, any state or other political
subdivision thereof, and any entity or official exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, government.

“Indemnified Party” has the meaning set forth in Section 7.2 of this Agreement.

“Indemnifying Party” has the meaning set forth in Section 7.2 of this Agreement.

“Licenses” has the meaning set forth in Section 3.16 of this Agreement.

“Lien” means any mortgage, pledge, security interest, assessment, encumbrance, lien, lease,
sublease, adverse claim, levy, or charge of any kind, or any conditional Contract, title retention
Contract or other contract to give or refrain from giving any of the foregoing.

 

19

 

“Losses” has the meaning set forth in Section 7.1 of this Agreement.

“Material Adverse Change” or “Material Adverse Effect” means, with respect to any Person, any
change or effect that is or is reasonably likely to be materially adverse to the business,
financial condition, results of operations, prospects (solely to the extent they have been publicly
disclosed and subject to any qualifications and assumptions applicable to such disclosure,
including any forward-looking statement disclaimer) or, where applicable, the management of such
Person.

“Person(s)” means any individual, sole proprietorship, partnership, joint venture, trust,
limited liability company, incorporated organization, association, corporation, institution, public
benefit corporation, entity or government (whether federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency, body or department
thereof).

“Prospectus” has the meaning set forth in Section 6.1(c) of this Agreement.

“Purchase Price” has the meaning set forth in Section 1.1 of this Agreement.

“Purchaser” has the meaning set forth in the Preamble of this Agreement.

“Registration Statement” has the meaning set forth in Section 6.1(a) of this Agreement.

“Requirement of Law” means as to any Person, the articles of incorporation, bylaws or other
organizational or governing documents of such Person, and any domestic or foreign and federal,
state or local law, rule, regulation, statute or ordinance or determination of any arbitrator or a
court or other Governmental Authority, in each case applicable to or binding upon such Person or
any of its properties or to which such Person or any of its property is subject.

“SEC” means the Securities and Exchange Commission.

“SEC Reports” has the meaning set forth in Section 3.7 of this Agreement.

“Securities Act” means the Securities Act of 1933, as amended, or any successor federal
statute, and the rules and regulations promulgated thereunder, all as the same shall be in effect
at the applicable time.

“Settlement” has the meaning set forth in Section 1.2 of this Agreement.

“Settlement Date” has the meaning set forth in Section 1.2 of this Agreement.

“Shares” has the meaning set forth in Section 1.1 of this Agreement.

 

20

 

2. Other Definitional Provisions.

(a) All references to “dollars” or “$” refer to currency of the United States of America.

(b) Terms defined in the singular shall have a comparable meaning when used in the plural, and
vice versa.

(c) All matters of an accounting nature in connection with this Agreement and the transactions
contemplated hereby shall be determined in accordance with GAAP.

(d) As used herein, the neuter gender shall also denote the masculine and feminine, and the
masculine gender shall also denote the neuter and feminine, where the context so permits.

(e) The words “hereof,” “herein” and “hereunder,” and words of similar import, when used in
this Agreement shall refer to this Agreement as a whole (including any exhibits or schedules
hereto) and not to any particular provision of this Agreement.

 

21exv10w1

Exhibit
10.1

EXCHANGE AGREEMENT

(Unrestricted Convertible Preferred)

                          (including any other persons or entities exchanging Notes hereunder for
whom the undersigned Holder holds contractual and investment authority, the “Holder”) enters into
this Exchange Agreement (the “Agreement”) with Forest City Enterprises, Inc., an Ohio corporation
(the “Company”) on ___, 2010 whereby the Holder will exchange (the “Exchange”) the
Company’s ___Senior Notes due ___(the “Notes”) for the Company’s ___% Series A Cumulative
Perpetual Convertible Preferred Stock (the “Preferred Stock”) governed by a Preferred Stock
Designation of the ___% Series A Cumulative Perpetual Convertible Preferred Stock (the “Preferred
Stock Designation”) that will constitute a part of the Company’s Amended Articles of Incorporation
at Closing (as defined below).

     On and subject to the terms hereof, the parties hereto agree as follows:

Article I: Exchange of the Notes for Preferred Stock

     At the Closing (as defined herein), the Holder hereby agrees to exchange and deliver to the
Company the following Notes, and in exchange therefor the Company hereby agrees to issue to the
Holder the number of shares of Preferred Stock described below and to pay in cash the following
accrued but unpaid interest on such Notes:

	 	 	 
	Principal Amount of Notes to be Exchanged:

	 	$
 
 (the
“Exchanged Notes”).
	 
	 	 
	Number of Shares of Preferred Stock to be issued in Exchange:
	 	 
	 

	 	 
 (the
“Holder’s Preferred Stock”).
	 
	 	 
	Cash Payment of Accrued but Unpaid Interest on Exchanged Notes:

	 	$
 
 (the
“Cash Payment”).

     The closing of the Exchange (the “Closing”) shall occur on a date (the “Closing Date”) no
later than three business days after the date of this Agreement. At the Closing, (a) the Holder
shall deliver or cause to be delivered to the Company all right, title and interest in and to the
Exchanged Notes free and clear of any mortgage, lien, pledge, charge, security interest,
encumbrance, title retention agreement, option, equity or other adverse claim thereto
(collectively, “Liens”), together with any documents of conveyance or transfer that the Company may
deem necessary or desirable to transfer to and confirm in the Company all right, title and interest
in and to the Exchanged Notes free and clear of any Liens, and (b) the Company shall issue to the
Holder the Holder’s Preferred Stock and shall deliver to the Holder the Cash Payment; provided,
however, that the parties acknowledge that the issuance of the Holder’s Preferred Stock to the
Holder may be delayed due to procedures and mechanics within the system of the Depository Trust
Company and that such delay will not be a default under this Agreement so long as (i) the Company
is using its best efforts to effect the issuance of the Preferred Stock, (ii) such delay is no
longer than three business days, and (iii) dividends shall accrue on such Preferred Stock from the
Closing Date. Simultaneously with or after the Closing, the Company may issue Preferred Stock to
one or more other holders of outstanding Notes or to other investors.

Article II: Covenants, Representations and Warranties of the Holder

     The Holder hereby covenants as follows, and makes the following representations and
warranties, each of which is and shall be true and correct on the date hereof and on the Closing
Date, to the Company, Lazard Frères & Co. LLC and Lazard Capital Markets LLC, and all such
covenants, representations and warranties shall survive the Exchange.

     Section 2.1 Power and Authorization. The Holder is duly organized, validly existing
and in good standing, and has the power, authority and capacity to execute and deliver this
Agreement, to perform its obligations hereunder, and to consummate the Exchange contemplated
hereby. If the Holder that is signatory

 

 

hereto is executing this Agreement to effect the exchange of Exchanged Notes beneficially
owned by one or more other persons or entities (who are thus included in the definition of “Holder”
hereunder), (a) such signatory Holder has all requisite discretionary authority to enter into this
Agreement on behalf of, and bind, each such other person or entity that is a beneficial owner of
Exchanged Notes, and (b) Exhibit A hereto is a true, correct and complete list of (i) the
name of each party delivering (as beneficial owner) Exchanged Notes hereunder, (ii) the principal
amount of such Holder’s Exchanged Notes, (iii) the number of shares of Holder’s Preferred Stock to
be issued to such Holder in respect of its Exchanged Notes, and (iv) the amount of the cash payment
to be made to such Holder in respect of the accrued interest on its Exchanged Notes.

     Section 2.2 Valid and Enforceable Agreement; No Violations. This Agreement has been
duly executed and delivered by the Holder and constitutes a legal, valid and binding obligation of
the Holder, enforceable against the Holder in accordance with its terms, except that such
enforcement may be subject to (a) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws affecting or relating to enforcement of creditors’ rights
generally, and (b) general principles of equity, whether such enforceability is considered in a
proceeding at law or in equity (the “Enforceability Exceptions”). This Agreement and consummation
of the Exchange will not violate, conflict with or result in a breach of or default under (i) the
Holder’s organizational documents, (ii) any agreement or instrument to which the Holder is a party
or by which the Holder or any of its assets are bound, or (iii) any laws, regulations or
governmental or judicial decrees, injunctions or orders applicable to the Holder.

     Section 2.3 Title to the Exchanged Notes. The Holder is the sole legal and beneficial
owner of the Exchanged Notes, and the Holder has good, valid and marketable title to the Exchanged
Notes, free and clear of any Liens (other than pledges or security interests that the Holder may
have created in favor of a prime broker under and in accordance with its prime brokerage agreement
with such broker). The Holder has not, in whole or in part, except as described in the preceding
sentence, (a) assigned, transferred, hypothecated, pledged, exchanged or otherwise disposed of any
of the Exchanged Notes or its rights in the Exchanged Notes, or (b) given any person or entity any
transfer order, power of attorney or other authority of any nature whatsoever with respect to the
Exchanged Notes. Upon the Holder’s delivery of the Exchanged Notes to the Company pursuant to the
Exchange, the Exchanged Notes shall be free and clear of all Liens created by the Holder.

     Section 2.4 Accredited Investor. The Holder is an “accredited investor” within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the
“Securities Act”).

     Section 2.5 No Affiliate, Related Party or 5% Shareholder Status. The Holder is not,
and has not been during the consecutive three month period preceding the date hereof, a director,
officer or “affiliate” within the meaning of Rule 144 promulgated under the Securities Act (an
“Affiliate”) of the Company. To its knowledge, the Holder did not acquire any of the Exchanged
Notes, directly or indirectly, from an Affiliate of the Company. The Holder and its Affiliates
collectively beneficially own and will beneficially own as of the Closing Date (but without giving
effect to the Exchange) (i) less than 5% of the aggregate outstanding shares of the Company’s Class
A common stock, par value $0.33 1/3 per share (the “Class A Common Stock”), and Class B common
stock, par value $0.33 1/3 per share (the “Class B Common Stock;” together with the Class A Common
Stock, the “Common Stock”), and (ii) less than 5% of the aggregate number of votes that may be cast
by holders of those outstanding securities of the Company that entitle the holders thereof to vote
generally on all matters submitted to the Company’s shareholders for a vote (the “Voting Power”).
The Holder is not a subsidiary, affiliate or, to its knowledge, otherwise closely-related to any
director or officer of the Company or beneficial owner of 5% or more of the outstanding Common
Stock or Voting Power (each such director, officer or beneficial owner, a “Related Party”). To its
knowledge, no Related Party beneficially owns 5% or more of the outstanding voting equity, or votes
entitled to be cast by the outstanding voting equity, of the Holder.

     Section 2.6 No Illegal Transactions. The Holder has not, directly or indirectly, and
no person acting on behalf of or pursuant to any understanding with the Holder has, engaged in any
transactions in the securities of the Company (including, without limitation, any Short Sales (as
defined below) involving any of the Company’s securities) since the time that such Holder was first
contacted by either the Company, Lazard Frères & Co. LLC or

 

 

Lazard Capital Markets LLC or any other person regarding an investment in the Preferred Stock
or the Company. Such Holder covenants that neither it nor any person acting on its behalf or
pursuant to any understanding with such Holder will engage, directly or indirectly, in any
transactions in the securities of the Company (including Short Sales) prior to the time the
transactions contemplated by this Agreement are publicly disclosed. “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 of Regulation SHO promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and all types of direct and
indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps,
derivatives and similar arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker-dealers or foreign regulated brokers. Solely for purposes of
this Section 2.6, subject to the Holder’s compliance with its obligations under the U.S. federal
securities laws and the Holder’s internal policies, “Holder” shall not be deemed to include any
subsidiaries or affiliates of the Holder that are effectively walled off by appropriate “Chinese
Wall” information barriers approved by the Holder’s legal or compliance department (and thus have
not been privy to any information concerning the Exchange).

     Section 2.7 Adequate Information; No Reliance. The Holder acknowledges and agrees
that (a) the Holder has been furnished with all materials it considers relevant to making an
investment decision to enter into the Exchange and has had the opportunity to review the Company’s
filings with the Securities and Exchange Commission (the “SEC”), including, without limitation, all
filings made pursuant to the Exchange Act, (b) the Holder has had a full opportunity to ask
questions of the Company concerning the Company, its business, operations, financial performance,
financial condition and prospects, and the terms and conditions of the Exchange, (c) the Holder has
had the opportunity to consult with its accounting, tax, financial and legal advisors to be able to
evaluate the risks involved in the exchange of the Notes pursuant hereto and to make an informed
investment decision with respect to such Exchange and (d) the Holder is not relying, and has not
relied, upon any statement, advice (whether legal, tax, financial, accounting or other),
representation or warranty made by the Company or any of its affiliates or representatives
including, without limitation, Lazard Frères & Co. LLC and Lazard Capital Markets LLC, except for
(i) a Term Sheet, together with a Summary Description of Series A Cumulative Perpetual Convertible
Preferred Stock from the Company, dated ___, 2010 describing the terms of the Preferred
Stock, (ii) the publicly available filings made by the Company with the SEC under the Exchange Act
and (iii) the representations and warranties made by the Company in this Agreement.

     Section 2.8 No Public Market. The Holder understands that no public market exists for
the Preferred Stock, and that there is no assurance that a public market will ever develop for the
Preferred Stock.

Article III: Covenants, Representations and Warranties of the Company

     The Company hereby covenants as follows, and makes the following representations and
warranties, each of which is and shall be true and correct on the date hereof and on the Closing
Date, to the Holder, Lazard Frères & Co. LLC and Lazard Capital Markets LLC, and all such
covenants, representations and warranties shall survive the Exchange.

     Section 3.1 Power and Authorization. The Company is duly incorporated, validly
existing and in good standing under the laws of its state of incorporation, and has the power,
authority and capacity to execute and deliver this Agreement, to perform its obligations hereunder,
and to consummate the Exchange contemplated hereby.

     Section 3.2 Valid and Enforceable Agreements; No Violations. This Agreement has been
duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms, except that such
enforcement may be subject to the Enforceability Exceptions. At the Closing, the Preferred Stock
Designation, substantially in the form of Exhibit B hereto, will constitute a part of the
Company’s Amended Articles of Incorporation and will govern the terms of the Preferred Stock. This
Agreement and consummation of the Exchange will not violate, conflict with or result in a breach of
or default under (i) the charter, bylaws or other organizational documents of the Company, (ii) any

 

 

agreement or instrument to which the Company is a party or by which the Company or any of its
assets are bound, or (iii) any laws, regulations or governmental or judicial decrees, injunctions
or orders applicable to the Company.

     Section 3.3 Validity of the Holder’s Preferred Stock. The Holder’s Preferred
Stock has been duly authorized by the Company and, when issued and delivered to the
Holder pursuant to the Exchange against delivery of the Exchanged Notes in accordance with the
terms of this Agreement, the Holder’s Preferred Stock will be validly issued, fully paid and
non-assessable, and the Holder’s Preferred Stock will not be subject to any preemptive,
participation, rights of first refusal and other similar rights. Assuming the accuracy of the
Holder’s representations and warranties hereunder, the Holder’s Preferred Stock (a) will be issued
in the Exchange exempt from the registration requirements of the Securities Act pursuant to Section
4(2) of the Securities Act, (b) will be free of any restrictions on resale by the Holder pursuant
to Rule 144 promulgated under the Securities Act, and (c) will be issued in compliance with all
applicable state and federal laws concerning the issuance of the Holder’s Preferred Stock.

     Section 3.4 Validity of Underlying Class A Common Stock . The Holder’s Preferred
Stock is convertible into shares of Class A Common Stock (the “Conversion Shares”) in accordance
with the terms of the Preferred Stock Designation. The Conversion Shares have been duly authorized
and reserved by the Company for issuance upon conversion of the Holder’s Preferred Stock and, when
issued upon conversion of the Holder’s Preferred Stock in accordance with the terms of the
Preferred Stock Designation, will be validly issued, fully paid and non-assessable, and the
issuance of the Conversion Shares will not be subject to any preemptive, participation, rights of
first refusal and other similar rights.

     Section 3.5 Listing Approval. The Conversion Shares have been listed on the New York
Stock Exchange.

     Section 3.6 Disclosure. On or before the first business day following the date of
this Agreement, the Company shall issue a publicly available press release or file with the SEC a
Current Report on Form 8-K disclosing all material terms of the Exchange (to the extent not
previously publicly disclosed).

Article IV: Miscellaneous

     Section 4.1 Entire Agreement. This Agreement and any documents and agreements
executed in connection with the Exchange embody the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof and supersede all prior and
contemporaneous oral or written agreements, representations, warranties, contracts, correspondence,
conversations, memoranda and understandings between or among the parties or any of their agents,
representatives or affiliates relative to such subject matter, including, without limitation, any
term sheets, emails or draft documents.

     Section 4.2 Construction. References in the singular shall include the plural, and
vice versa, unless the context otherwise requires. References in the masculine shall include the
feminine and neuter, and vice versa, unless the context otherwise requires. Headings in this
Agreement are for convenience of reference only and shall not limit or otherwise affect the
meanings of the provisions hereof. Neither party, nor its respective counsel, shall be deemed the
drafter of this Agreement for purposes of construing the provisions of this Agreement, and all
language in all parts of this Agreement shall be construed in accordance with its fair meaning, and
not strictly for or against either party.

     Section 4.3 Governing Law. This Agreement shall in all respects be construed in
accordance with and governed by the substantive laws of the State of New York, without reference to
its choice of law rules.

     Section 4.4 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which taken together shall constitute one and the
same instrument. Any counterpart or other signature hereon delivered by facsimile shall be deemed
for all purposes as constituting good and valid execution and delivery of this Agreement by such
party.

 

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of
the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	“HOLDER”:	 	 	 	“COMPANY”:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	FOREST CITY ENTERPRISES, INC.	 	 
	 
	 	 	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 
	Name:

	 	 	 	 
	 	Name:
	 	 	 	 
	 
	Title:

	 	 	 	 
	 	Title:
	 	 	 	 

 

 

EXHIBIT A

Exchanging Beneficial Owners

	 	 	 	 	 	 	 
	 	 	 	 	Number of Shares of	 	 
	Name of	 	Principal Amount of	 	Holder’s Preferred	 	 
	Beneficial Owner	 	Exchanged Notes	 	Stock	 	Cash Interest Payment
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 

 

 

EXHIBIT B

Preferred Stock Designation

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}]]