EXHIBIT 4.2
NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE, TRANSFER
OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (I)
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (II) AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT IS AVAILABLE.
December 31, 2002 AMENDED AND RESTATED STOCK PURCHASE WARRANT Warrant No.: 7
To Subscribe for and Purchase Class A Common Stock of
NEXTERA ENTERPRISES, INC.
THIS AMENDED AND RESTATED STOCK PURCHASE WARRANT ("Warrant") certifies
that, for value received, Bank of America, N.A. (together with any subsequent
transferees of all or any portion of this Warrant, the "Holder"), is entitled,
upon the terms and subject to the conditions hereinafter set forth, to subscribe
for and purchase from Nextera Enterprises, Inc., a Delaware corporation
(hereinafter called the "Company"), up to seven hundred seventy-three thousand,
six hundred and forty-six (773,646) fully paid and non-assessable shares of the
Company's Class A Common Stock, $0.001 par value per share (the "Shares"), at
the price equal to the Exercise Price (as defined in Section 1 hereof) (subject
to adjustment as provided in Section 7 hereof). The number and character of such
Shares are subject to adjustment as provided herein. Capitalized terms used
herein and not defined herein shall have the meanings given such terms in that
certain Second Amended and Restated Credit Agreement dated December 31, 2002, by
and among the Company, the Holder and the other lenders party thereto (the
"Credit Agreement"; and together with all related promissory notes, mortgages,
guaranties, agreements, documents and instruments from time to time entered into
by Company and any other person or obligor pursuant thereto, the "Credit
Documents").
This Warrant amends and restates in its entirety that certain Warrant
for up to seven hundred seventy-three thousand, six hundred and forty-six
(773,646) fully paid and non-assessable shares of the Company's Class A Common
Stock, $0.001 par value per share issued on March 29, 2002 (the "Prior Warrant")
made by the Company in favor of the Holder.
1. Definitions. As used herein the following terms shall have the
following meanings:
"Act" means the Securities Act of 1933 as amended, or a
similar Federal statute and the rules and regulations of the
Commission issued under that Act, as they each may, from time
to time, be in effect.
"Additional Shares of Common Stock" shall mean all shares of
Common Stock issued (or, pursuant to Section 7(c), deemed to
be issued) by the Company after the Original Issue Date, but
shall not include:
(A) shares of Common Stock issued or issuable upon
conversion of shares of all of preferred stock of the Company
outstanding as of the Original Issue Date;
(B) shares of Common Stock issued or issuable upon
exercise of this Warrant or any other warrant or option of the
Company outstanding as of the Original Issue Date;
(C) shares of Common Stock issued by way of dividend or
other distribution on shares of Common Stock excluded from the
definition of Additional Shares of Common Stock by the
foregoing clause (A) or (B) or on Common Stock so excluded; or
(D) shares issued under an employee stock purchase plan
or pursuant to options exercisable for shares of Common Stock
(such number subject to equitable adjustment in the event of
any stock dividend, stock split, combination, reorganization,
recapitalization, reclassification or other similar event),
issued after the date of this Warrant to directors, officers,
employees or consultants of the Company and any Subsidiary
pursuant to any qualified or non-qualified stock option plan
or other equity incentive plan approved by the Board of
Directors of the Company, equal to the first 30% of the
outstanding stock of the Company, calculated on a
post-Original Issue Date, fully-diluted basis.
"Common Stock" shall mean the Class A Common Stock of the
Company, $0.001 par value per share.
"Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities directly or
indirectly convertible into or exchangeable for Common Stock.
"Exercise Price" shall mean $0.86 per share.
"New Financing Source" shall mean a source other than the
Company.
"Option" shall mean rights, options or warrants to subscribe
for, purchase or otherwise acquire Common Stock or Convertible
Securities.
"Original Issue Date" shall mean the date on which this
Warrant is originally issued.
2. Purchase Rights. The purchase rights represented by this
Warrant are exercisable by the Holder in whole or in part (and not as to a
fractional share), at any time and from time to time commencing on the date
hereof and ending at 5:00 p.m. on the date (the "Expiration Date") eighteen (18)
months after the indefeasible payment in full in cash or cash equivalents of the
Credit Obligations.
3. Exercise of Warrant; Net Issue Exercise.
3.1 Exercise of Warrant. Subject to Section 2 above, the purchase
rights represented by this Warrant may be exercised, in whole or in part and
from time to time, by the surrender of this Warrant and the duly executed Notice
of Exercise (the form of which is attached as Exhibit A) at the principal office
of the Company and by the payment to the Company, by check, of an amount equal
to the then applicable Exercise Price per share multiplied by the number of
Shares then being purchased. Upon exercise, the Holder shall be entitled to
receive, within a reasonable time, a certificate or certificates, issued in the
Holder's name or in such name or names as the Holder may direct, for the number
of Shares so purchased. The Shares so purchased shall be deemed to be issued as
of the close of business on the date on which this Warrant shall have been
exercised.
3.2. Net Issue Exercise.
(a) In lieu of exercising this Warrant as set forth in
Section 3.1, the Holder may elect to receive Shares equal to the value
of this Warrant (or the portion thereof being cancelled) by surrender
of this Warrant at the principal office of the Company together with
notice of such election in which event the Company shall issue to the
Holder a number of Shares computed using the following formula:
X = Y (A - B)
---------
A
2
Where X = the number of Shares to be issued to the Holder;
Y = the number of Shares purchasable under this Warrant, or if
only a portion of this Warrant is being cancelled, the gross
number of Shares covered by the portion of this Warrant being
cancelled;
A = the fair market value of one Share, as determined by the Board
of Directors of the Company pursuant to paragraph (b) below,
as at the time the net issue election is made pursuant to this
Section (the "Determination Date"); and
B = the Exercise Price (as adjusted to the date of such
calculations).
Such Shares shall be issued as soon as practicable after the Determination Date.
(b) For purposes of this Section, fair market value of a
Share shall be determined as follows:
(A) If the Company's Common Stock is not
publicly traded at the Determination Date, the fair
market value of a Share shall be a value reasonably
determined by the Company's Board of Directors. In
the event that the Holder disagrees with the Board of
Directors' determination of fair market value, then
the fair market value shall be determined by an
appraiser selected by the Holder (the "Holder's
Appraiser") and whose appraisal (the "Holder's
Appraisal") shall be furnished to the Company within
20 days after the Board of Directors' determination
of fair value, and if the Company does not object to
such determination within 15 days after receipt of
the Holder's appraisal, then the fair market value
determined by the Holder's Appraiser shall be the
fair market value of a Share. In the event that the
Company objects to such determination then the
Company shall select an appraiser (the "Company's
Appraiser") who shall review the determination of the
Holder's Appraiser and issue a report thereon (the
"Company's Appraisal") within 30 days after the
delivery of the Holder's Appraisal to the Company and
within 10 days after the issuance of such report to
the Holder's Appraiser, the Holder's Appraiser and
the Company's Appraiser shall meet to negotiate in
good faith to reach agreement on the fair market
value of a Share, and such agreed value shall be the
fair market value of a Share. In the event that the
Company's Appraiser and the Holder's Appraiser are
unable to reach agreement then such Appraisers shall
select an appraiser (the "Third Appraiser") within 5
days after the meeting between the Holder's Appraiser
and the Company's Appraiser, and the average of two
appraisals, consisting of the appraisal made by the
Third Appraiser and the appraisal of the Holder's
Appraiser and Company's Appraiser (whichever is
closest to that of the Third Appraiser), shall be
conclusive and binding on the Company and the Holder.
The Company and the Holder shall each pay one half
(1/2) of the fees and expenses of each of the
Company's Appraiser, the Holder's Appraiser and the
Third Appraiser.
(B) if the Company's Common Stock is
publicly traded on the Determination Date, the fair
market value of a Share shall be equal to (1) the
average of the closing prices quoted on the Nasdaq
Stock Exchange, Inc., if applicable, or the average
of the last bid and asked prices of the Common Stock
quoted in the Nasdaq OTC Bulletin Board or the
over-the-counter-market, or (2) if the Common Stock
is then traded on a national securities exchange, the
average of the high and low closing prices of the
Common Stock listed on the principal national
securities exchange on which the Common Stock is so
traded, in each case for the twenty (20) trading days
preceding the Determination Date.
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4. Shares to be Issued; Reservation of Shares. The Company
covenants that the Shares that may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon issuance, be fully paid and
non-assessable, and free from all liens and charges with respect to the issue
thereof. During the period within which the purchase rights represented by the
Warrant may be exercised, the Company will at all times have authorized and
reserved, for the purpose of issuance upon exercise of the purchase rights
represented by this Warrant, a sufficient number of shares of its Common Stock
to provide for the exercise of the right represented by this Warrant.
5. No Fractional Shares. No fractional shares shall be issued
upon the exercise of this Warrant. In lieu thereof, a cash payment shall be made
equal to such fraction multiplied by the fair market value of such shares of
Common Stock, as determined pursuant to Section 3.2(b) above.
6. Adjustment for Merger, Consolidation or Sale of Assets. In the
event that at any time or from time to time after the Original Issue Date, the
Company shall merge or consolidate with or into another entity or sell all or
substantially all of its assets, the Holder hereof shall thereafter have the
right to receive the kind and amount of shares of stock, other securities,
property or cash deliverable or payable to the holders of the Common Stock of
the Company that the Holder hereof upon exercise of this Warrant would have been
entitled to had the Holder hereof exercised the remaining portion of this
Warrant into shares of Common Stock immediately prior thereto.
7. Adjustment of Exercise Price and Number of Shares.
(a) Adjustment of Exercise Price and Number of Shares.
The Exercise Price and number of shares of Common Stock issuable upon
the exercise of the Warrant shall be adjusted as set forth in this
Section 7 with the intent that the rights of the Holder to exercise
shall not be impaired.
(b) Adjustment for Combination, Consolidation, Stock
Dividend or Subdivision of Common Stock. If the outstanding shares of
Common Stock shall be subdivided into a greater number of shares or a
dividend in Common Stock shall be paid in respect of Common Stock, the
Exercise Price in effect immediately prior to such subdivision or at
the record date of such dividend shall simultaneously with the
effectiveness of such subdivision or immediately after the record date
of such dividend be proportionately reduced. If outstanding shares of
Common Stock shall be combined or consolidated into a smaller number of
shares, the Exercise Price in effect immediately prior to such
combination or consolidation shall, simultaneously with the
effectiveness of such combination or consolidation, be proportionately
increased. When any adjustment is required to be made in the Exercise
Price, the number of shares of Common Stock purchasable upon the
exercise of this Warrant shall be changed to the number determined by
dividing (i) an amount equal to the number of shares issuable upon the
exercise of this Warrant immediately prior to such adjustment,
multiplied by the Exercise Price in effect immediately prior to such
adjustment, by (ii) the Exercise Price in effect immediately after such
adjustment.
(c) Issue of Options and Convertible Securities Deemed
Issue of Additional Shares of Common Stock. If the Company at any time
or from time to time after the Original Issue Date shall issue any
Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive
any such Options or Convertible Securities, then the maximum number of
shares of Common Stock (as set forth in the instrument relating
thereto, without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of
such Options or, in the case of Convertible Securities or Options
therefor, the conversion or exchange of such Convertible Securities,
shall be deemed to be Additional Shares of Common Stock issued as of
the time of such issue or, in case such a record date shall have been
fixed, as of the close of business on such record date, provided that
Additional Shares of Common Stock shall not be deemed to have been
issued unless the consideration per share (determined pursuant to
paragraph (e) below) of such Additional Shares of Common Stock would be
less than the Exercise Price in effect on the date of and immediately
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prior to such issue, or such record date, as the case may be, and
provided further in any such case in which Additional Shares of Common
Stock are deemed to be issued:
(i) No further adjustment in the Exercise Price
shall be made upon the subsequent issue of Convertible
Securities or shares of Common Stock upon the exercise of such
Options or conversion or exchange of such Convertible
Securities;
(ii) If such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise,
for any increase in the consideration payable to the Company,
or decrease in the number of shares of Common Stock issuable,
upon the exercise, conversion or exchange thereof, the
Exercise Price computed upon the original issue thereof (or
upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon any
such increase or decrease becoming effective, be recomputed to
reflect such increase or decrease insofar as it affects such
Options or the rights of conversion or exchange under such
Convertible Securities;
(iii) No readjustment pursuant to clause (ii)
above shall have the effect of increasing the Exercise Price
to an amount which exceeds the lower of (A) the Exercise Price
immediately prior to the adjustment affected upon the original
issue of Options or Convertible Securities (or upon the
occurrence of a record date with respect thereto) pursuant to
the provisions hereof, or (B) the Exercise Price that would
have resulted from any issuance of Additional Shares of Common
Stock between the original adjustment date and such
readjustment date;
(iv) Upon the expiration or termination of any
unexercised Option, the Exercise Price shall be readjusted to
the Exercise Price which would have been in effect at the time
of such expiration or termination had such Option never been
issued (but including the recalculation of any intervening
adjustments), and the Additional Shares of Common Stock deemed
issued as the result of the original issue of such Option
shall not be deemed issued for the purposes of any subsequent
adjustment of the Exercise Price; and
(v) In the event of any change in the number of
shares of Common Stock issuable upon the exercise, conversion
or exchange of any Option or Convertible Security, including,
but not limited to, a change resulting from the antidilution
provisions thereof, the Exercise Price then in effect shall
forthwith be readjusted to such Exercise Price as would have
obtained had the adjustment which was made upon the issuance
of such Option or Convertible Security (prior to such change)
been made upon the basis of such change, but no further
adjustment shall be made for the actual issuance of Common
Stock upon the exercise or conversion of any such Option or
Convertible Security.
(d) Adjustment of Exercise Price Upon Issuance of
Additional Shares of Common Stock. In the event the Company shall at
any time after the Original Issue Date issue Additional Shares of
Common Stock (including Additional Shares of Common Stock deemed to be
issued pursuant to paragraph (c) above), without consideration or for a
consideration per share less than the Exercise Price in effect on the
date of and immediately prior to such issue, then and in such event,
such Exercise Price shall be reduced, concurrently with such issue, to
a price (calculated to the nearest cent) calculated as follows:
(i) The adjusted Exercise Price shall be equal
to a fraction: (A) the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to
such issue (including shares described in clause (ii) below),
plus the number of shares of Common Stock which the aggregate
consideration received by the Company for the total number of
Additional Shares of Common Stock so issued would
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purchase at such Exercise Price; and (B) the denominator of
which shall be the number of shares of Common Stock
outstanding immediately prior to such issue (including shares
described in clause (ii) below) plus the number of such
Additional Shares of Common Stock so issued.
(ii) For the purposes of clause (i), the number
of shares of Common Stock outstanding immediately prior to
such issue shall be calculated on a fully diluted basis, as if
all Convertible Securities had been fully converted into
shares of Common Stock immediately prior to such issuance and
the Warrant and any other outstanding Options had been fully
exercised immediately prior to such issuance (and any
resulting Convertible Securities fully converted into Common
Stock) as of such date.
(iii) The applicable Exercise Price shall not be
reduced at the time of any issuance of Additional Shares of
Common Stock if the amount of such reduction would be an
amount less than $0.01, but any such amount shall be carried
forward and reduction with respect thereto shall be made at
the time and together with any subsequent reduction which,
together with such amount and any other amounts so carried
forward, shall aggregate $0.01 or more.
(e) Determination of Consideration. For purposes of
paragraph (d), the consideration received by the Company for the issue
of any Additional Shares of Common Stock shall be computed as follows:
(i) Cash and Property: Such consideration shall:
(A) insofar as it consists of cash, be
computed at the aggregate of cash received by the
Company;
(B) insofar as it consists of property
other than cash, be computed at the fair market value
thereof at the time of such issue, as determined in
good faith by the Board of Directors; and
(C) in the event Additional Shares of
Common Stock are issued together with other shares or
securities or other assets of the Company for
consideration which covers both, be the proportion of
such consideration so received, computed as provided
in clauses (A) and (B) above, as determined in good
faith by the Board of Directors.
(ii) Options and Convertible Securities. The
consideration per share received by the Company for Additional
Shares of Common Stock deemed to have been issued pursuant to
paragraph (c), relating to Options and Convertible Securities,
shall be determined by dividing:
(A) the total amount, if any, received
or receivable by the Company as consideration for the
issue of such Options or Convertible Securities, plus
the minimum aggregate amount of additional
consideration (as set forth in the instruments
relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such
consideration) payable to the Company upon the
exercise of such Options or the conversion or
exchange of such Convertible Securities, or in the
case of Options for Convertible Securities, the
exercise of such Options for Convertible Securities
and the conversion or exchange of such Convertible
Securities; by
(B) the maximum number of shares of
Common Stock (as set forth in the instrument relating
thereto, without regard to any provision contained
6
therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or the
conversion or exchange of such Convertible
Securities.
(f) Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment of the Exercise Price pursuant to this
Section 7, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and
furnish to the Holder a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment
or readjustment is based. The Company shall, upon the written request
at any time of the Holder, furnish or cause to be furnished to such
holder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Exercise Price at the time in effect, and (iii)
the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the exercise of the
Warrant.
8. No Rights as a Shareholder. This Warrant does not entitle the
Holder to any voting rights or other rights as a shareholder of the Company
prior to exercise of this Warrant and the payment for the Shares so purchased.
Notwithstanding the foregoing, the Company agrees to transmit to the Holder such
information, documents and reports as are generally distributed to holders of
the capital stock of the Company concurrently with the distribution thereof to
the shareholders. Upon valid exercise of this Warrant and payment for the Shares
so purchased in accordance with the terms of the Warrant, the Holder shall be
deemed a shareholder of the Company.
9. Sale or Transfer of the Warrant; Legend. The Warrant and the
Shares shall not be sold or transferred unless either (i) they first shall have
been registered under the Act, or (ii) the Company first shall have been
furnished with an opinion of legal counsel reasonably satisfactory to the
Company to the effect that such sale or transfer is exempt from the registration
requirements of the Act. Each certificate representing any Warrant shall bear
the legend set out on page 1 hereof. Each certificate representing any Shares
shall bear a legend substantially in the following form, as appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
Such Warrant and Shares may be subject to additional restrictions on transfer
imposed under applicable state and federal securities law.
10. Put Right. Commencing on December 31, 2004, and prior to the
Expiration Date, the Holder shall have the right, exercised by the delivery of
written notice to the Company (a "Put Notice"), to require the Company to cancel
the unexercised portion of this Warrant, and all related rights in exchange for
a cash payment (the "Put Payment") equal to $0.3525 per share payable to the
Holder within ten (10) days of receipt by the Company of the Put Notice and the
original Warrant for cancellation.
11. Call Option. At any time during the one year period following
the indefeasible payment in full in cash or cash equivalents of the Credit
Obligations, and prior to June 30, 2004, the Company shall have the right
exercised by the delivery of written notice to the Holder (a "Call Notice") to
cancel this Warrant and the purchase rights hereunder in exchange for a cash
payment (the "Call Payment") equal to $0.5288 per share, payable to the Holder
within five (5) days after delivery by the Company of the Call Notice, provided
however, that any payment made pursuant to this Section 11 may only be made out
of a New Financing Source. Notwithstanding anything to the contrary contained
herein, the Holder shall be entitled to exercise this Warrant in whole or in
part at any time after the receipt of the Call Notice until the receipt by the
Holder of the Call Payment. In the event that the Holder chooses to
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exercise all or a portion of the Warrant after receipt of the Call Notice, the
Company shall have the option to rescind such Call Notice or to exercise its
call option with respect to that portion of the Warrant which remains
unexercised through the delivery of a pro rata portion of the Call Payment. The
Company shall have the right to exercise the call option set forth herein one
time only.
12. Modifications and Waivers. This Warrant may not be changed,
waived, discharged or terminated except by an instrument in writing signed by
the party against which enforcement of the same is sought.
13. Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder or the Company shall be
sufficiently given or made if sent by registered or certified mail, postage
prepaid, addressed to the parties as provided below:
If to Holder: Bank of America, N.A.
0000 Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx,
Managing Director
with a copy to:
Brown, Rudnick, Freed & Gesmer
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Esquire
Xxxx X. Xxxxx, Esquire
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If to Company: Nextera Enterprises, Inc.
0 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx,
Chief Financial Officer
with a copy to: Maron & Sandler
000 Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esquire
14. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants with the Holder that upon its receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate and, in the case of any such loss, theft
or destruction, of an indemnity or security reasonably satisfactory to it, and
upon reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of this Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or
stock certificate.
15. Representations and Warranties of Holder. By accepting this
Warrant, the Holder represents and warrants that it is acquiring this Warrant
and the Shares for its own account, for investment and not with a view to, or
for sale in connection with, any distribution thereof or any part thereof.
Holder represents and warrants that it is (a) experienced in the evaluation of
businesses similar to the Company, (b) is able to fend for itself in the
transactions contemplated by this Warrant, (c) has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Company, (d) has the ability to bear the economic
risks of an investment in the Company, (e) has been furnished with or has had
access to such information as is specified in subparagraph (b)(2) of Rule 502
promulgated under the Act and (f) has been afforded the opportunity to ask
questions of and to receive answers from the Company and to obtain any
additional information necessary to make an informed investment decision with
respect to an investment in the Company. The Holder further represents that it
is an "accredited investor" as defined in Rule 501(a) of Regulation D under the
Act.
16. Representations and Warranties of Company. The Company
represents that:
(a) The execution and delivery of this Warrant
has been duly authorized by the Company's Board of Directors
and constitutes the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, or other laws affecting the
enforcement of creditors' rights in general and except that
the enforceability of the obligations hereunder is subject to
general principals of equity (regardless of whether such
enforceability is considered in a proceeding at equity or at
law). Neither the execution nor the delivery of this Warrant,
nor fulfillment of nor compliance with the terms and
provisions of this Warrant, nor the issuance of Shares upon
exercise of the Warrant, will violate the terms of the
certificate of incorporation or by-laws of the Company or, to
the best of the Company's knowledge, any agreement (including
any agreement with stockholders), instrument, judgment, decree
or statute to which the Company is subject.
(b) As of December 31, 2002, the authorized
capital stock of the Company consisted of (i) 99,300,000
shares of Common Stock, $0.001 par value per share, 95,000,000
shares of which are designated as Class A Common Stock, of
which 31,885,896 shares are issued and outstanding, and
4,300,000 shares of which are designated as Class B Common
Stock, of which 3,869,570 shares are issued and outstanding,
and (ii) 10,000,000 shares of Preferred Stock, $0.001 par
value per share
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600,000 shares of which are designated as Series A Cumulative
Convertible Preferred Stock, of which 39,544 shares are issued
and outstanding.
(c) Except as set forth in subparagraph (b)
above, and in registration statements filed by the Company
under the Act or in any report filed by the Company under the
Securities Exchange Act of 1934, as amended, the Company has
not authorized any rights (either preemptive or other) or
options to subscribe for or purchase from the Company, or any
warrants or other agreements providing for or requiring the
issuance by the Company of, any capital stock or any
securities convertible into or exchangeable for its capital
stock.
(d) Sufficient shares of authorized but unissued
shares of Common Stock of the Company have been reserved by
appropriate corporate action with the prospective exercise of
the Warrant, and, the issuance of either the Warrant or the
shares of Common Stock upon exercise of the Warrant will not
require any further corporate action by the stockholders or
directors of the Company, will not be subject to preemptive
rights (unless the exercise of the same has been irrevocably
waived) in any present stockholders of the Company and will
not conflict with any provision of any agreement to which the
Company is a party or by which it is bound, and such Common
Stock, when issued upon exercise of the Warrant in accordance
with its terms, will be duly authorized, fully paid and
non-assessable.
17. Registration Rights.
(a) Piggy Back Registration Rights. If (but without any
obligation to do so) the Company shall determine to register (a
"Company Registration") any of its securities for its own account or
for any other person (other than a registration under the Act of shares
issued in connection with any acquisition of any entity or business,
shares issuable solely upon the exercise of stock options, or shares
issuable solely pursuant to employee benefit plans or arrangements,
including registration statements on Form X-0, X-0 or any successor
form), the Company shall do the following:
(i) promptly give the Holder written notice
thereof (which shall include a list of the jurisdictions in
which the Company intends to attempt to register or qualify
such securities under the applicable blue sky or other state
securities laws); and
(ii) include among the securities which it then
registers or qualifies all Registrable Securities (as defined
below) specified in a written request or requests, made within
fifteen (15) days after receipt of the written notice from the
Company, by the Holder. The Holder shall have the right to
withdraw its request for inclusion of its Registrable
Securities in any registration statement by giving written
notice to the Company of its request to withdraw. The Company
may withdraw a Company Registration at any time prior to the
time it becomes effective whether or not the Holder has
elected to include Registrable Securities (as defined below)
in such registration. For purposes of this Warrant, the term
"Registrable Securities" shall mean all shares of Common Stock
issued and issuable upon exercise of the Warrant; provided
however, that shares of Common Stock which are "Registrable
Securities" shall cease to be Registrable Securities (a) upon
any sale pursuant to a registration statement under the Act,
Section 4(1) of the Act or Rule 144 promulgated under the Act
or (b) at such time as such shares of Common Stock are freely
saleable under Rule 144(k) promulgated under the Act (or a
successor provision).
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(b) Limitations of Registration. If and to the extent
that the Holder shall have, at the time of the delivery of the written
request referred to in subparagraph (a) above, no present intention of
selling or distribution, the Company shall be obligated to effect such
registration, qualification or compliance with respect to the Holder's
Registrable Securities only if and to the extent, in each case, that
such registration, qualification and compliance are at the time
permitted by the applicable statutes or rules and regulations
thereunder or the practices of the governmental authority concerned.
(c) Registration Procedures. In the case of each
registration, qualification or compliance pursuant to this Section 17,
the Company will keep the Holder advised in writing as to the
initiation of proceedings for such registration, qualification and
compliance and as to the completion thereof, and will advise the
Holder, upon written request, of the progress of such proceedings. At
the expense of the Company, the Company will (i) keep such
registration, qualification and compliance current and effective for a
period of the earlier of (A) 120 days, or (B) until the Holder has
completed the distributions relating thereto, including, without
limitation, the filing of post-effective amendments and supplements to
any registration statement or prospectus, as necessary to permit the
sale or distribution of Registrable Securities not theretofore sold or
distributed, and (ii) take all necessary action under any applicable
blue sky or other state securities laws to permit such exercise, sale
or distribution, all as reasonably requested by such Holder; provided,
however, that the Company shall not be required in connection therewith
to qualify as a foreign corporation in any jurisdiction in which it is
not now so qualified or to take any action that would subject it to
general consent to service of process or taxation. The Company shall
not be required to file, cause to become effective or maintain the
effectiveness of any registration statement that contemplates a
distribution of securities on a delayed or continuous basis pursuant to
Rule 415 under the Act.
(d) Registration Rights. Anything to the contrary in
Section 17 notwithstanding, in connection with any Company
Registration, the Company shall not be required to include any of the
Holder's Registrable Securities in such Company Registration unless the
Holder accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it (or by other persons
entitled to select the underwriters), and then only in such quantity as
the underwriters determine in their sole discretion will not jeopardize
the success of the offering by the Company or will not adversely affect
the aggregate proceeds to the Company from the offering. If the total
amount of securities, including Registrable Securities and all other
securities requested to be included in such offering by any stockholder
of the Company, exceeds the amount of securities that the underwriters
determine in their sole discretion is compatible with the success of
the offering or the aggregate proceeds to the Company from the
offering, then the number of Shares to be offered for the account of
the Holder and all such other persons participating in such
registration shall be reduced (to zero if necessary) or limited pro
rata in proportion to the respective number of Shares requested to be
registered by the Holder and each other person to reduce the total
number of Shares requested to be included in such offering to the
number of Shares, if any, recommended by such underwriters.
(e) Indemnification. The Company will indemnify, defend
and hold harmless the Holder to the fullest extent that such agreement
is enforceable under applicable law against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of material fact
contained therein (or in any related registration statement,
notification or the like) or any omission (or alleged omission) to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any
violation by the Company of any rule or regulation promulgated under
the Act applicable to the
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Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and
will reimburse the Holder for any legal or any other expenses
reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action provided, however, that
the Company will not be liable in any such case to the extent that any
such claim, loss, damage or liability arises out of or is based on any
untrue statement or omission based upon written information furnished
to the Company by an instrument duly executed by the Holder and stated
to be specifically for use therein.
(f) The Holder will indemnify, defend and hold harmless
the Company to the fullest extent that such agreement is enforceable
under applicable law against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on
any untrue statement (or alleged untrue statement) of material fact
contained therein (or in any related registration statement,
notification or the like) or any omission (or alleged omission) to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any
violation by the Holder of any rule or regulation promulgated under the
Act applicable to the Holder and relating to action or inaction
required of the Holder in connection with any such registration,
qualification or compliance, and will reimburse the Company for any
legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent (and only to the extent) that such
claims, losses, damages, liabilities and actions relate to reliance on
any untrue statement or omission based upon written information
furnished to the Company by an instrument duly executed by the Holder
and stated to be specifically for use in the registration statement,
provided, however, that such Holder's obligations hereunder shall be
limited to an amount equal to the proceeds received by such Holder of
the Registrable Securities sold in such registration.
(g) Notwithstanding the foregoing, to the extent that the
provisions on indemnification contained in the underwriting agreement
entered into in connection with a Company Registration are in conflict
with the provisions of this Section 17, the provisions in the
underwriting agreement shall control.
18. Binding Effect on Successors. This Warrant shall be binding
upon any corporation succeeding the Company by merger, consolidation or
acquisition of all or substantially all of the Company's assets, and all of the
obligations of the Company relating to the Shares issuable upon exercise of this
Warrant shall survive the exercise and termination of this Warrant and all of
the covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the Holder.
19. Amendments. No approval, consent, amendment or waiver of this
Agreement shall be effective unless in writing and signed by the Company and
Holder.
20. Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
21. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the Commonwealth of Massachusetts.
22. Entire Agreement. This Warrant constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof, and
any and all other written or oral agreements relating to the subject matter
hereof existing among any of the parties hereto are expressly cancelled,
including, but not limited to, the Prior Warrant.
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IN WITNESS WHEREOF, the parties have caused this Warrant to be executed
by their duly authorized representatives as of the date first above written.
NEXTERA ENTERPRISES, INC.,
as Company
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxxx
Chief Financial Officer
BANK OF AMERICA, N.A.,
as Lender and Holder
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx
Managing Director
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