World Energy Solutions, Inc.

Two former employees/consultants of GSE have filed two separate complaints in the District Courts of Dallas County and Tarrant County Texas against World Energy and GSE Consulting, LP alleging, among other things, claims related to breach of contract, quantum meruit, unjust enrichment, promissory estoppel, tortious interference, fraud, assumed liability, and civil conspiracy. One of the plaintiffs has filed a claim against a GSE principal for intentional infliction of emotional distress.  Each plaintiff claims that GSE and/or the Company failed to pay commissions due for services that they provided prior to the date of the Company’s purchase of certain GSE assets, based on their respective employment or independent contractor agreements with GSE. Each plaintiff has also asserted claims for recovery of their attorneys’ fees. The Company denies the allegations and has filed counterclaims for damages, asserting claims for conversion, unjust enrichment, misappropriation of confidential information, and violation of the Texas Theft

^{Liability Act against each of the plaintiffs. The Company has also filed a counterclaim against one of the plaintiffs for her breach of a non-competition and non-solicitation agreement, based on her working for a competitor of the Company’s during her one-year restrictive period and her improper solicitation of former GSE customers on behalf of the competitor.  The Company also filed a counterclaim against the other plaintiff for breach of contract based on the exclusivity obligation set forth in her independent contractor agreement.  This counterclaim will only apply if the jury finds that World Energy assumed the plaintiff’s independent contractor agreement.  The Company’s motions for summary judgment seeking dismissal of all of the plaintiff’s claims was denied in its entirety in one of the cases.  In the other case, the Company’s motion for summary judgment was partially granted, dismissing the plaintiff’s civil conspiracy claim.  One of the plaintiffs successfully moved for summary judgment on all counterclaims except the breach of contract based on the exclusivity obligation.  The courts have assigned trial dates of November 17, 2014 and January 26, 2015. The court recently granted a continuance of the November 17th} trial to a time and date to be determined in February / March 2015.  

Prior to the closing of the Offer, the Board may, subject to compliance with certain obligations, (i) terminate the Merger Agreement to enter into a definitive agreement with respect to a Takeover Proposal; or (ii) change its recommendation to the Company’s stockholders regarding tendering into the Offer and approving the Merger and related transactions and the Board determines in good faith, after consultation with its legal advisors, that failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable law. Upon termination of the Merger Agreement under specified circumstances, the Company and the Parent will be required to pay termination and reverse termination fees, respectively.

On November 4, 2014, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with EnerNOC, Inc. (“Parent”) and Wolf Merger Sub Corporation, a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Parent and Merger Sub will commence an offer (the “Offer”) to acquire all of the outstanding shares of our common stock (the “Shares”), at a price of $5.50  per share in cash (the “Offer Price”). The Merger Sub is required to commence the Offer no later than 10 business days after the date of the Merger Agreement.  If the Offer is consummated, Shares not tendered will be acquired by Merger Sub in a second step merger (the “Merger”) for the Offer Price.

Completion of the Offer is subject to a number of conditions, including (i) that a majority of the Shares outstanding be validly tendered and not validly withdrawn prior to the expiration of the Offer; (ii) completion of a 55-day “go-shop” period during which time we will solicit alternative proposals to the Offer and Merger and (iii) certain other customary conditions.  The Offer and the Merger are not subject to any financing conditions. The Board has approved the Merger Agreement and unanimously recommends that our stockholders tender their Shares in the Offer. We will file a Schedule 14D-9 with the SEC containing the recommendation of the Board on the same day that the Offer is commenced.

Parent and the Company have made customary representations, warranties and covenants in the Merger Agreement, including covenants (i) to promptly make all filings required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable laws with respect to the Offer and the Merger; and (ii) to use their reasonable best efforts to take all appropriate action to consummate and effectuate the Offer, the Merger and the other transactions contemplated by the Merger Agreement. Additionally, prior to consummation of the Merger, we have agreed to conduct our business in all material respects in the ordinary and usual course and to comply with certain other operating covenants through the consummation of the Merger.

^{Two former employees/consultants of GSE have filed two separate complaints in the District Courts of Dallas County and Tarrant County Texas against GSE Consulting, LP and us alleging, among other things, claims related to breach of contract, quantum meruit, unjust enrichment, promissory estoppel, tortious interference, fraud, assumed liability, and civil conspiracy. One of the plaintiffs has filed a claim against a GSE principal for intentional infliction of emotional distress.  Each plaintiff claims that GSE and/or we failed to pay commissions due for services that they provided prior to the date of the Company’s purchase of certain GSE assets, based on their respective employment or independent contractor agreements with GSE. Each plaintiff has also asserted claims for recovery of their attorneys’ fees. We deny the allegations and have filed counterclaims for damages, asserting claims for conversion, unjust enrichment, misappropriation of confidential information, and violation of the Texas Theft Liability Act against each of the plaintiffs. We have also filed a counterclaim against one of the plaintiffs for her breach of a non-competition and non-solicitation agreement, based on her working for a competitor of ours during her one-year restrictive period and her improper solicitation of former GSE customers on behalf of the competitor.  We have also filed a counterclaim against the other plaintiff for breach of contract based on the exclusivity obligation set forth in her independent contractor agreement.  This counterclaim will only apply if the jury finds that we assumed the plaintiff’s independent contractor agreement.  Our motions for summary judgment seeking dismissal of all of the plaintiff’s claims was denied in its entirety in one of the cases.  In the other case, our motion for summary judgment was partially granted, dismissing the plaintiff’s civil conspiracy claim.  One of the plaintiffs successfully moved for summary judgment on all counterclaims except the breach of contract based on the exclusivity obligation.  The courts have assigned trial dates of November 17, 2014 and January 26, 2015. The court recently granted a continuance of the November 17th} trial to a time and date to be determined in February / March 2015.